{draw:g} {draw:frame} {draw:frame} {draw:frame} {draw:frame} {draw:frame} {draw:frame} {draw:frame} Table of Contents Declaration This report is submitted as partial fulfilment of the requirements for Module MBA 407 Financial Management at the European Business School London in spring 2010. We declare that this document embodies the results of the group’s work and that it has been composed by the group. Following normal academic conventions, we have made due acknowledgement of the work of others. We have worked together as a group and we have all contributed equally and would therefore be graded as a group. …………..…………………………… Fouad El Ghzal …………..…………………………… Nikola Pamler …………..…………………………… Ulrich …show more content…
But the NPV is not suitable to compare projects running fordifferent time periods. Instead I used the Equivalent Annual Cash Flow to compare both projects, regarding their time-period, as the Equivalent Annual Cash Flow measures the current economic gain for every year in a projects life period. As a result I got an Equivalent Annual Cash Flow of $124,103.76 for the PKC and an Equivalent Annual Cash Flow of $323,731.71 for the BKC. That is why I came to the point that the PKC project would be the better choice as it has the lower Equivalent Annual Cash Flow value which is an indicator for financial security. Even the Beach Karaoke Club (BKC) would have higher financial benefits this investment option is less attractive, due to an uncertain income which leads to a higher risk. If we take several unfavourable situations into account the PKC will still have a positive equivalent annual cash flow while our project’s equivalent that guarantees us annual cash flow will be negative. Even this fixed income from the rent goes only for a 4-years period it is still more attractive than an uncertain income over a 6-years period. I know that you liked the idea of recruit staff for the BKP from the current surplus of the hotel’s workforce, as the BKP project did not has to care about their salaries and does not have opportunity cost’s for recruiting and training. But we also have to consider that maybe one day the hotel requires all their workforce, which will be a problem
Finally, in order to complete a more accurate comparison between the two projects, we utilized the EANPV as the deciding factor. Under current accepted financial practice, NPV is generally considered the most accurate method of predicting the performance of a potential project. The duration of the projects is different, one lasts four years and one lasts six years. To account for the variation in time frames for the projects and to further refine our selection we calculated the EANPV to compare performance on a yearly basis.
Financial Management: “The process for and the analysis of making financial decisions in the business context.” (Cornett, Adair, & Nofsinger, 2016, p. 5).
Day J. and Krakhmal V. (2006) fourth edition (2011), An introduction to accounting and finance in business, Milton Keynes, The Open University
NPV is known as the best technique in the capital budgeting decisions. There were flows in payback as well as discounted pay back periods because it don’t consider the cash flow after the payback and discounted pay back period. To remove this flows net present value (NPV) method, which relies on discounted cash flow (DCF) techniques is used to find the value of the project by considering the cash flow of the project till its life. To implement this approach, we proceed as
Sources of information:Bevan J, Dransfield R, Coupland-Smith H, Goymer J and Richards C – BTEC Level 3 National Business StudentBook 1 (Pearson, 2009) ISBN 9781846906343Bevan J, Goymer J, Richards C and Richards N – BTEC Level 3 National Business Student Book 2(Pearson, 2009) ISBN 9781846906350Coupland-Smith H and Mencattelli C – BTEC Level 3 National Business Teaching Resource Pack(Pearson, 2009) ISBN
The Case Study is provided by the Harvard Business School and is considered necessary reading prior to the understanding the responses contained herein. This paper is
As we discussed in class, every business is faced with these issues and they are important to managers making strategic decisions. One of the first things learned about business is that if there is no demand for a good or service, the firm that provides it will not continue to exist. Over time the hotel industry has continued to change with market conditions and make itself attractive to business
The course outcomes for the FIN540X-A1-07-Managerial Finance by Dr. Anne (Sullivan University, 2015b, p1) are:
This document is authorized for use only in Financial Management23 by Dr. Raj, at Institute of Management Technology - Dubai from January 2015 to July 2015.
1. Brigham, Eugene F. and Michael C. Ehrhardt. Financial Management Theory and Practice, 13th Edition, Thompson South-Western, ISBN-13# 978-14390-7809-9, ISBN-10#1-4390-7809-2
“Group work is a form of voluntary association of members benefiting from cooperative learning that enhances the total output of the activity than when done individually”.
This document is authorized for use only by Albertina Dias at ISG Business School until September 2013. Copying
REFERENCES•Ross, S.A., Westerfield, R.W., Jaffe, J., Jordan, B.D. "Modern Financial Management". McGraw-Hill, Eighth Edition, (2008)•R.A. Brealey and S.C. Myers, "Principles of Corporate Finance", McGraw-Hill, Seventh Edition, (2003).
The following paper analyzes a project from financial perspectives using the capital budgeting techniques like Net Present Value (NPV) and Internal Rate of Return (IRR).
Apart from references of other people’s work which were fully acknowledged, I hereby certify that this research work was wholly done by me under the guidance of my supervisor, Mallam Sani Gurowa of Department of Accounting, University of Abuja, Abuja, Nigeria.